Exam 2: Choices and Trade - Offs in the Market

a. Draw a production possibility frontier for a country that produces two goods, beer and pretzels. Assume that resources are equally suited to both tasks. b. Define opportunity costs. c. Use your production possibility frontier graph to demonstrate the principle of opportunity costs.

-Refer to Table 2-8. Ireland has a comparative advantage in the production of

-Refer to Table 2-3. Dina faces ________ opportunity costs in the production of sliders and hot wings.

-Refer to Table 2-5. What is Barney's opportunity cost of making a pogo stick?

-Refer to Figure 2-7. If the two countries have the same amount of resources and the same technological knowledge, which country has an absolute advantage in the production of cotton?

It is possible to have an absolute advantage in producing a good or service without having a comparative advantage.

A production possibility frontier with a bowed outward shape indicates

An inward shift of a nation's production possibility frontier can occur due to

Entrepreneurs bring together the factors of production to produce goods and services.

-Refer to Figure 2-3. A movement from X to Y

If the production possibility frontier is ________, then opportunity costs are constant as more of one good is produced.

If society decides it wants more of one good and all resources are fully utilised, then

Consider the following items: a. the album '21' by Adele B. a Dutch horticulturalist's new method for cultivating hybrid tulips C. Rolls Royce's 'Spirit of Ecstasy' hood ornament design D. the sale of Tumi luggage at a Macy's department store Which of the items listed is an example of intellectual property?

Any output combination outside a production possibility frontier is associated with unused or underutilised resources.

-Refer to Figure 2-1. Point B is

-Refer to Table 2-2. Assume Billie's Bedroom Shop only produces pillows and blankets. A combination of 5 pillows and 21 blankets would appear

-Refer to Table 2-8. What is Scotland's opportunity cost of producing one motorcycle?

-Refer to Figure 2-4. If the economy is currently producing at point X, what is the opportunity cost of moving to point Y?

If additional units of a good could be produced at a constant opportunity cost, the production possibility frontier would be bowed outward (concave).

Without an increase in the supplies of factors of production, how can a nation achieve economic growth?